Wednesday, April 03, 2013 10:18 pm

Personal relationships at focus in Sands trial

By HANNAH DREIERAssociated Press

Attorneys told conflicting stories about the role that personal relationships and favors play in the Chinese gambling enclave of Macau during opening arguments Wednesday in a dispute between the Las Vegas Sands casino and a Hong Kong businessman.

Richard Suen claims he was hired by Sands to help build relationships with the Chinese government. The case turns on whether meetings Suen set up between Sands executives and Beijing officials in 2001 helped the company get a foothold in Macau, a special administrative region of China.

Attorneys for Richard Suen argued in a Las Vegas court that he should be compensated $328 million for his success. "This is about not paying your debts even when you have the means to," Suen attorney John O'Malley said.

But the Sands team told jurors that Suen is owed nothing because officials in Macau, not Beijing, decide which companies to license. The former Portuguese colony, which is about an hour boat ride west of Hong Kong, is connected to mainland China by a narrow strip of land.

"There is an old saying: `Success has a thousand fathers but failure is an orphan.' That is the story of this case," said Sands attorney Richard Sauber as Suen removed his glasses and wiped his face with a tissue.

Sands CEO Sheldon Adelson was expected to testify Thursday, and members of the jury will be allowed to ask him questions. Attorneys also argued outside the presence of the jury about how Adelson would approach the stand.

O'Malley acknowledged that the 79-year-old casino mogul has difficulty walking, but asked that he not enter the room on the arm of a family member, as it could evoke undue sympathy with the jury. During the previous trial, the billionaire was escorted to the stand by his wife.

It's the second time this fight has played out in a Clark County court. A jury in 2008 awarded $58.6 million to Suen, but the Nevada Supreme Court overturned the verdict in 2010.

Among other things, the Supreme Court said the district judge shouldn't have allowed hearsay statements during the trial.

Suen filed the lawsuit in 2004 after failing to reach a compensation agreement with Sands. He said he and his company were promised a $5 million success fee and 2 percent of net casino profits in exchange for helping Sands open its first casino in Macau, now the world's biggest gambling market.

Suen is now asking for more than three times the amount of compensation he requested during the 2008 trial because of Sands' explosive success in Macau. The trial is expected to last about a month.

Suen, a former business partner of Adelson's brother, Leonard Adelson, claims he arranged for the mogul to meet high-ranking Chinese officials, including Vice Premier Qian Qichen and Beijing Mayor Liu Qi. He also says he helped Sands curry favor by stopping Congress from voting on a nonbinding resolution in 2001 that would have asked the U.S. Olympic Committee to vote against China's bid to host the 2008 Summer Olympic Gaming in Beijing.

O'Malley told jurors on Wednesday that Macau could be susceptible to influence from the mainland.

"You can see it as one very tiny piece of China," he said, pointing to a map of that country.

Both sides sought to educate the jury on the Chinese concept of "guanxi" or personal relationships.

Suen's team argued that his friendships helped Sands gain favor in the gambling enclave. Sauber, the Sands attorney, told jurors that "guanxi" is nothing more than an abstract concept.

"This word does not mean evidence, it does not mean documentation," he said.

Sauber also suggested that Adelson may have had his own "guanxi," noting that Adelson used his connection to the Republican party to arrange a 2001 meeting with former president George W. Bush's ambassador to China. Adelson made headlines last year with his hefty political contributions.

Both sides will call expert witnesses to support their view of the relationship between Macau and Beijing officials. In the previous trial, only Suen's side called such a witness.

Sands' witness will be the former "No. 2" to the U.S. ambassador in China, Sauber said.

The company partnered with Hong Kong-based Galaxy Entertainment in February 2002 and was awarded one of three gambling licenses by the Macau government. The companies could not reach an agreement, however, and the partnership was dissolved.

Macau then awarded Las Vegas Sands a subconcession, a decision that Suen's lawyers said was a result of their client's earlier lobbying.

Sands now operates four resorts in Macau, as well as the Venetian and the Palazzo casinos on the Las Vegas Strip.

The company is under investigation by the Securities and Exchange Commission and the Justice Department in connection with a lawsuit filed by the former chief executive officer of Sands China.

The former executive, Steven Jacobs, attended opening statements and shook Suen's hand. He was fired in 2010 and filed a wrongful termination lawsuit claiming he was let go for opposing company demands that he engage in improper conduct.